This is ‘the last place you want to get your stock advice from,’ says investing expert
Ryan Ermey | CNBC | August 10th, 2021
When asked how everyday investors should go about choosing individual stocks to add to their portfolios, financial professionals respond pretty much in unison: Do your own research. But if you have a full-time job that doesn’t involve looking at stock charts, analyzing investments can get overwhelming.
“I’m not sure people understand the amount of time consumption and research it takes,” says Sam Huszczo, a certified financial planner and founder of SGH Wealth Management in Southfield Michigan. “It takes energy to find a new pick. And then keeping up with everything — the textbook would say you [would ideally] spend an hour per week on each stock.” If you own a handful of stocks, that can really add up.
Luckily, there’s no shortage of time-saving stock advice on the internet. But when everyone and their mother is touting stocks, who can you trust?
Some newsletters have a strong track record; others don’t
Investigate just about any stock strategy, and you’re likely to find a newsletter that covers it. But whether you’re investing based on the Dogs of the Dow, companies’ buyback announcements, or anything else, treat anyone dispensing stock picks to subscribers with suspicion, says Huszczo.
“If an investing pro is charging for a stock-picking service, it’s a classic sign that their investment fund is underperforming,” he says. “If their investments were crushing it, they wouldn’t put out a newsletter for pennies when they could make dollars. If they were outperforming, they’d want to keep their competitive advantage a secret.”